Gold price slightly retreats from the early session gains ahead of the FOMC meeting minutes which is set to be released later in the day. On August 8, the precious metal plunged to $1,688 per ounce, its steepest decline in seven years. The sell-off is driven by a combination of stronger than expected US employment data and the passing of US President Joe Biden’s infrastructure spending plan.
On Wednesday, August 11th, the precious metal started to pick up after the US headline inflation rate came in in line with expectations. The data has eased concerns of the US Federal Reserve starting asset tapering earlier than expected because as we know gold is the typical hedge against inflation.
This week the gold price started on a positive note as concerns over the economic damage from surging Delta coronavirus cases, and political tension in Afghanistan boosted the safe-haven metal's appeal. Moving ahead, the gold inventors anxiously awaiting the latest minutes from the FED, which could provide further clues on the Fed's tapering timeline and the central bank's plans to balance interest rates against its inflation target.
Gold, short-term and long-term technical outlook
On the daily time frame, the gold is currently supported at $1778 and the resistance is around $1800. On the upper side, the buyers should wait for a weekly close above the $1800 psychological level before going long. If the metal break and close above $1800, the next levels to watch $1818 and then the crucial resistance area $1830/35. On the downside, any meaningful pullback now seems to find some support near the $1778 zones, below which the slide could further get extended towards the $1773 and $1764 regions.
In the long term, watch for the weekly close below $1720 or above $1835, which will give a larger confirmation of direction in the long term.
Trading is risky and your entire investment may be at risk. Please ensure that you fully understand the risks involved.